Top Pitfalls in Online Business Activity Statement (BAS) Lodgement
- LQB
- Oct 7, 2021
- 1 min read
Updated: Oct 4, 2023
Business owners are well aware of the significance of filing a Business Activity Statement (BAS). Unlike individual taxpayers who only deal with income tax, businesses registered for Goods and Services Tax (GST) face a more complex process. They must regularly lodge a BAS, responsible for reporting and paying various business taxes, including GST and Pay As You Go (PAYG) instalments. Navigating BAS lodgement can be intricate, and errors are not uncommon. To ensure a smooth online lodgement process, it's crucial to steer clear of these common pitfalls:
Failing to separate business and personal transactions
An issue that is particularly prevalent amongst small business and sole traders is failing to accurately distinguish between their business transactions from their personal ones. This is important as a BAS will account for the taxes paid for business purchases. As a result, it is important to develop an approach that will allow you to differentiate between these two different transactions. An effective method is to upkeep a periodic bookkeeping schedule. By recording your business transactions more often, you will be able to more easily recognise any personal transaction that has accidentally been mixed into your business invoices. This will help to reduce the likelihood of placing private transactions into your business’ BAS and help to ensure a mistake-free submission.
Clerical errors
There’s no doubt that clerical mistakes occur. Rushed submissions and tired eyes can often lead to a perfect recipe for filing errors. Whilst we can not completely eliminate the occurrence of clerical errors, there are methods to help prevent them. Firstly, allocating a time slot to carry out your bookkeeping can help to ensure that you have sufficient time to record your transactions as accurately as possible. Additionally, by scheduling a period of time to complete your bookkeeping you can allow yourself to have an abundance of time to correctly record your transactions for an accurate BAS. Other tips to help reduce clerical errors are to ensure that you are not spending hours on end staring at a screen as tired eyes lead to an easy creation of numerical errors and petite mistakes that can quickly build up to create large issues.
Complying with the ATO’s requirements
There are a range of obligations set out by the Australian Tax Office (ATO) in regards to submitting a BAS, and keeping up with all of them can often become a struggle. For most companies, it is required that they lodge a quarterly BAS, however this is all dependent on each individual entity and how they are classified within the ATO’s guidelines. It may be helpful to note down the relevant due dates for your business in order to submit your BAS in time and avoid being charged interest on late payments. Furthermore, when completing your BAS, it is important to note that only whole dollars will be accepted. Thus for all of your figures, ensure that you have omitted any cents, rounding down to the nearest whole number. Therefore a $10.25 transaction and a $10.99 transaction will both be submitted as $10 on your BAS.
Finding help
Bookkeeping can be highly beneficial for your company, as you can read about in our article Why is bookkeeping necessary?; however, completing a quarterly BAS can be a lot of work. In order to avoid these common mistakes, an option can be to outsource a registered BAS Agent. An Agent will be qualified to carry out all of your BAS requirements and with an abundance of experience, your BAS submission is likely to run smoothly without any headaches.
Lodging your BAS is an important part of your business and with this guide, you can check to ensure that you have not made any of the mistakes that often occur. Conversely, if completing a BAS is still seeming like a burden, reaching out to a registered BAS Agent may be the best decision for you. You can easily book a consultation session with us right here to have a chat about your BAS or any of your financial needs!
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